PEFINDO has affirmed its idA- ratings for PT Adhi Karya (Persero) Tbk

(March 10, 2026)--PEFINDO has affirmed its idA- ratings for PT Adhi Karya (Persero) Tbk (ADHI), its shelf-registered (SR) bond III, and SR bond IV. Outlook for the corporate rating is revised to CreditWatch with Negative Implications, reflecting ADHI’s heightened liquidity risk following the Company’s inability to obtain SR Bond III holders’ approval to waive its financial covenants, putting ADHI currently in the remedial period until the end of June 2026. The corporate rating affirmation reflects our view of its important role for the government, ADHI’s strong market position, and its benefits as a state contractor. The rating, however, is constrained by its high leverage, execution risks related to ADHI’s growing order book, and a volatile business environment.

Failure to resolve the covenant breach may trigger accelerated repayment obligations on the outstanding bonds, which could further pressure the Company’s liquidity and credit profile, potentially resulting in multiple rating downgrades. Conversely, the outlook could be revised back to stable without any rating change should ADHI successfully address its financial covenant and demonstrate stronger liquidity buffers, particularly through the realization of cash inflows from outstanding receivables related to completed projects.

Established in 1960, ADHI is a state-owned contractor company primarily engaged in providing construction services. Its business is classified into four main segments: construction, engineering, procurement, and construction (EPC), property and realty, and investment infrastructure. As of September 30, 2025, PT Biro Klasifikasi Indonesia (Persero) holds 64.3% of ADHI, and the public owns the remainder. (ends)